Disney & Procurement

Purchasing professionals who focus on the end product will be considered part of the creative process and therefore be more effective, a senior film industry executive told the Institute for Supply Management conference in California yesterday.

Steven Miller, senior vice-president of strategic sourcing and procurement at the Walt Disney Company, was making a presentation on strategic sourcing for the entertainment supply chain.

“Creative folks need to not view you as a different part of Disney or a different part of the team – you’re part of their team – singularly focused on their success and showing as much passion for their creativity as they show.

“Alice in Wonderland was a gift to us: a phenomenally big movie, the cast was great and the box office sales far exceeded what we expected and that will translate to DVD sales. That’s what it’s about – the creative content more than cost savings or sourcing initiatives.”

Miller gave an overview of Disney’s multiple supply chains. These support a set of five business areas including theme parks, movies, television and consumer products, with commodity categories spanning everything from costumes to call centres.

Strategic sourcing was introduced in 1999, a move Miller admits was “maybe 15 years behind some industries”. The sourcing department was expected to save $300 million (£195 million) a year within five years. By 2008 it achieved $1 billion (£650 million) cumulative annual savings.

Approximately 300 people work in purchasing and the company has about 70,000 “high-level active suppliers”, with the top 200 accounting for about 23 per cent of spend.

The future for Disney – and therefore the focus of the sourcing teams – is more investment in theme parks (it is hoping to build a Shanghai resort), fit-outs of its stores and film franchises. Meanwhile, purchasing is also working on increasing sustainable procurement and anti-piracy innovations

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National Trust to Create Vacancies

The National Trust is recruiting 11 regional buyers as part of a broader move to put procurement at the forefront of its ‘going local’ strategy. 


The charity protects and makes public more than 350 historic houses, gardens and ancient monuments in England, Wales and Northern Ireland. The new purchasing posts reflect its goals for the next decade, which include getting closer to local communities and suppliers and putting properties and natural environments “back at the centre of community life to encourage a sense of belonging, local pride and identity”. 



So far the Trust has shifted power from the centre to the properties, such as historic sites and stately homes, including control of budget. It will now advocate local procurement and recruitment policies to connect its properties more closely to local communities.

Regional procurement managers will be appointed to cover Yorkshire, the North East, North West, South West, South, and South East of England, East Anglia, the West and East Midlands. They also cover Northern Ireland and Wales.

Responsibilities will include developing effective relationships with stakeholders in the region, developing strong, sustainable working relationships with suppliers and putting in place sustainable contracts and, where appropriate, supporting local producers and supply chains. 



The National Trust could not provide any more detail but the advertisement states: “We’re moving from direct buying and looking for real leaders to empower others to reach their potential.

“In short, by identifying efficiencies in line with our sustainability ethos and local agenda, you’ll be helping ensure we can put more into protecting our dramatic coastline, beautiful countryside and historic buildings and make sure they remain accessible to all.”

Manufacturing registers strong and encouraging growth

The UK manufacturing industry remained buoyant last month, reaching its highest level of expansion in almost 16 years.

According to the latest CIPS/Markit Manufacturing Purchasing Managers’ Index – where a figure above 50 represents growth – total activity in the sector registered 57.2 in March. This was up from the previous month’s figure of 56.5.

Output for March rose for the 10th month in a row, with the index coming in at 61.9 – a stronger performance than February’s figure of 59.8. The rate of increase reached its highest since July 1994 and was the second fastest in the survey’s 18-year history.

New orders increased for the ninth consecutive month, expanding at only a slightly slower pace than in January, when growth was at a six-year high. Employment levels fell in March as a result of cost-cutting initiatives, redundancies and workforce restructuring.

CIPS chief executive David Noble said the drop in employment was mainly confined to larger firms and signalled attempts to cut operating costs rather than “dampened demand”.

Commenting on the overall results, he said: “To see such a fast-paced recovery in the manufacturing sector is hugely encouraging. Strong growth in the intermediate goods sector should filter through to consumer and investment goods producers in the coming months, boding well for the sustainability of the upturn.”

Further coverage of PMI reports is available here.

BSKYB expects £200M!! in damages

BSkyB expects damages of nearly £200 million following its lengthy court battle with EDS over whether the IT services firm was completely truthful in its attempt to win a contract.

The satellite television operator had originally sued for £709 million in damages, claiming EDS had made a “deliberate, cynical and dishonest” sales pitch to win a £48 million deal to provide a new customer relationship management system – a contract that was terminated after two years.

Sky began its legal action against EDS (now known as HP Enterprise Services following a takeover by computing firm HP) in August 2004.

In his judgment Mr Justice Ramsey, who has taken 18 months to deliver his verdict, ruled in favour of the broadcaster, saying it would have chosen PricewaterhouseCoopers – a rival bidder for the contract – if EDS had not misrepresented its ability to deliver the project.

The judge said EDS had not carried out the “proper analysis” of time needed to complete implementation of the system they claimed to have, nor were there “reasonable grounds” – as they indicated – to believe they could deliver the system as promised. Mr Justice Ramsey said an EDS employee made the assertion “dishonestly” and “knew it to be false”.

But he ruled EDS had not lied about the level of resources necessary and how much it would cost to complete the project.

He also said EDS had “failed to exercise reasonable skill and care or conform to good industry practice”, with no effective programme management and a failure to provide the necessary technical and managerial resources. Because of this the judge awarded damages to Sky for breach of contract.

HP responded to the decision in a statement: “This is a legacy issue, dating back to the EDS business in 2000, which HP inherited when it acquired EDS in 2008. We are pleased the court dismissed the majority of the allegations made. While we accept that the contract was problematic, HP strongly maintains EDS did nothing to deceive BSkyB. HP will be seeking permission to appeal.”

The court will determine the level of costs and damages at a later date. Lawyers predict the case will lead to greater scrutiny of tender proposals and submissions by buyers and suppliers

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Jobs in Procurement on the up!!!

Recruitment market on the up



The UK purchasing jobs market is set to gain buoyancy over the coming months as permanent posts open up across the country, recruiters have reported.

A market update by procurement recruitment consultancy Edbury Daley out this week said permanent vacancies have been rising steadily since the end of 2009.

Other recruiters agreed and said this is the result of both general optimism in the UK economy and greater confidence among candidates, who are now more willing to move jobs. Richard Silk, account director at procurement consultancy CIPS GPA, said that up to 50 per cent of candidates are reporting that conditions are looking better for jobseekers.

But while the permanent job market is improving, demand for interims has slowed, according to Jonathan Ross, director of specialist recruitment firm Butler Ross. “This is possibly as a result of companies looking to strengthen their core procurement capabilities for the long term,” he told SM.

Edbury Daley director Andrew Daley agreed there had been a shift in focus. He said: “Cutting procurement staff during the recession is very short-sighted, but now people are starting to look forward again.”

It is a turnaround from the situation just a few months ago when recruiters reported problems appointing the right talent, despite the market being flooded with candidates.